Posted in advice on locking in your mortgage, Applying for a mortgage - Lisa Alentejano services the interior, British Columbia Mortgages, Canadian Economy, Canadian Home Buyers Academy, Canadian Mortgage News, First Time Home Buyer Steps, Hombuyers Downpayment, Home Buyer Closing Costs, Home Loans, Kamloops broker, Kamloops First Time Home Buyer Tips, Kamloops home mortgages, Kamloops Mortgage Broker - Lisa Alentejano, Kamloops Mortgages, Mortgage Affordability, Mortgage Broker Kamloops, Mortgages - Get a second opinion, Pre Approval Mortgage, Protecting your biggest investment your mortgage, Real Estate Market, Refinance Your Mortgage, Refinancing, Save your money, Why use a mortgage broker

CANADIAN HOME BUYERS ACADEMY

Working For You!

 

 

Are you interested in making some cash when you buy or sell your next home? Maybe you simply want to learn more about Real Estate in Canada? Have You been looking for general information on buying and financing a home but cant seem to find the information in one specifac place that has consistent information.  Take a good look at this program, I think you will find alot of great information and tools for you to use.

I am proud to be a part of this worthy and valuable program.

Go check it out here http://www.canadianhomebuyersacademy.ca

Advertisements
Posted in BC Mortgages, Canadian Mortgage News, Fixed rates, fixed term mortgages, Interior home mortgage, Kamloops First Time Home Buyer Tips, Kamloops Mortgage Broker, Kamloops Mortgage Broker - Lisa Alentejano, Kamloops mortgage consultant, kamloops mortgage financing, Kamloops Mortgages, Kelowna Mortgage Broker, Low Interest Rates, Mortgage Broker Kamloops, Mortgage Consultant Kamloops, mortgage financing kamloops, Mortgage Playground - Lisa Alentejano, Mortgage Consultant, Mortgage Rates, Mortgages - Get a second opinion, Protecting your biggest investment your mortgage, Refinance Your Mortgage, Refinancing, Renewing your mortgage, Save your money, Vancouver Mortgages, Why use a mortgage broker

Do your homework first… read the fine print – Rate of 2.99 to good to be true?

Although you will never hear any bank say that publicly, this is what is going on. Recently there has been some industry chatter about a few banks offering a sub 3% 5 year fixed product. One particular institution is bragging about their 6 billion dollar portfolio under administration, this product, and how great it is. At first glance you might think ” WOW, that’s awesome!” However as with all mortgages, you have to dig a bit deeper to find out the real nuts and bolts of this sub 3% offer. It’s a great offer alright for the bank, not for you; the consumer.

Based on an average mortgage size of $250,000, that’s 24,000 Canadians that negotiated directly with the bank who will feel ripped off once they find out about their terms and conditions. I am very pro client / consumer, and my job is to look out for their best interests so I simply can’t endorse this product. Consumers though need to know why they shouldn’t either. This product is priced well below the market average for 5 year product, and does not come without it’s “catches”. It’s definitely buyer beware and the bank will not tell you this.

Some of the features (or non-features you might say) are:

Minimal or no pre-payment privileges

This product has extremely low pre-payment features. On a monthly increase basis this could mean nothing to less than half of what the industry norm is. Lump sum payments may also be nothing or less than half the industry norm and if allowed only once per year. Pre-payment features are extremely beneficial and allow for strategies to be put in place. Lack of strategy means lack of interest savings for clients and consumers.

Fully Closed

When I say fully closed, I mean just that. A borrower cannot get out of the mortgage, unless they sell their place if at all. Who wants to sell their place if they want to refinance? I don’t know too many people that would. If borrowers do sell their place, a substantial penalty such as a 6 month interest penalty typically applies.  Borrowers may be offered  a reduced penalty (3 month) if they choose to refinance with that same bank however this still does not offer a borrower access to the entire mortgage market. It also confines them to more inferior product. If a borrower is going to pay a penalty, they rightfully should have the opportunity to entertain superior product. The average mortgage is in place roughly 3 years before being paid out or refinanced. Life just happens. More than likely a borrower will need to do something with their mortgage during their current mortgage term.  To be locked down by these terms and clauses makes absolutely no sense.

No guarantee of best rates upon renewal or refinance

Banks know that consumers may not know the mortgage market at any particular point in time. What’s happening in the mortgage world is usually not on the forefront of people’s minds. When it comes time to renew or refinance borrowers can be offered a rate as high as 1% above the market norm and not realize it. When a borrower asks the bank to do better, they may be offered a discount further however that .5% “special” discount doesn’t look so good when the rest of the market is priced much lower. This amounts to more interest the borrower has to pay over the course of their mortgage. This is more money for the bank that should be staying with you.

Your mortgage will also be registered as a collateral charge.

Beware of this one as it is a very sly practice among banks. What does a collateral charge mean to a borrower? The bank will instruct the lawyer to register the title as a running account. More than likely you running account will have a global limit of the property value itself. This doesn’t mean you are going to get this money, it just means that your property is fully tied up. If you choose another lender at renewal, legal fees apply. A second mortgage or Line of Credit can’t be put behind this product because the bank has tied up ALL of your equity. No matter which way you turn, the bank has shackled you to more costs and fees.

The lesson here is that rate is not everything. Product and Strategy is. Borrowers need flexible product to execute strategy.

Contact me for more information or apply online at http://www.mortgageplayground.com

 

 

Posted in advice on locking in your mortgage, Applying for a mortgage - Lisa Alentejano services the interior, Canadian Mortgage News, Fixed rates, fixed term mortgages, Home Loans, Kamloops Mortgage Broker, Kamloops Mortgages, Low Interest Rates, Mortgage Affordability, Mortgage Broker Kamloops, Mortgage Consultant Kamloops, mortgage financing kamloops, Mortgage Playground - Lisa Alentejano, Mortgage Consultant, Mortgages - Get a second opinion, Pre Approval Mortgage, Protecting your biggest investment your mortgage, Refinancing, Renewing your mortgage, Save your money

2 Out of 3 Don’t Shop at Renewal

Thank you to one of my fellow brokers for writing this article.    Consumers are becoming slightly more educated about shopping for a mortgage, but clearly not enough, that means we have alot more work to do to make sure consumers are much more informed about their options when shopping for a mortgage wherever they are in the mortgage process.  READ ON…

Every now and then we see a mortgage stat that’s a jaw-dropper.

This finding from Manulife Bank is one of them. It suggests there are a lot more people with money to burn than one might expect.

Manulife recently surveyed 1,000 Canadian homeowners between the ages of 30 to 59. Among respondents with a mortgage, two-thirds (65%) did not compare mortgages from more than one lender when they last renewed.

More specifically:

  • 20% stayed with their current lender after maturity and did not negotiate
  • 45% stayed with their current lender and tried to negotiate a good deal, but did not shop around
  • 35% compared mortgages from several lenders and choose the best overall lender and product.

The youngest group (ages 30-39) was most likely to shop around (41%), but was also most likely to
accept their current lender’s offer without negotiating (24%).

We asked Doug Conick, President & CEO of Manulife Bank, why on earth people would give so much power to their lender.

“Most people lead very busy lives and may not have the time or expertise to fully investigate their options,” he said.

“Through our debt survey we’ve found that only about 3 out of 10 Canadians work with a financial adviser to manage their debt more effectively.”

“With busy lives and a lack of advice for most, this decision often gets left until very close to the renewal date, causing borrowers to follow the path of least resistance and renew with their current lender.”

“The unfortunate thing,” he added, “is that this could end up costing them a lot of extra money and keep them in debt longer than they need to be.”

That’s for sure.

In our experience, people who auto-renew often pay 1/2%-3/4% more than necessary, or worse! In fact, we’ve seen innumerable people sign renewal letters at their bank’s “special offer” rate, which is usually well above the market. (Example: Today’s 5-year fixed “special offer” bank rates are 3.94% to 4.09%. That’s up to 80 basis points above competitive rates on the street.)

Even a 1/4% rate difference amounts to over $4,000 more in interest over five years, on a $200,000 mortgage with a 20-year amortization. That’s money that could normally go towards prepaying a fat chunk of principal.

It’s hard to fathom why anyone would let a lender pick their pocket like this. At the very least, folks must find it within their strength to lift up the phone and call an independent mortgage planner.

Even if you’d rather stay with your current lender at renewal, seek out a second opinion. You absolutely owe it to yourself to keep your lender honest by surveying the market.

Of course, this all begs the question of why someone would ever want to deal exclusively with a lender that aims to maximize the interest they pay…but that’s a story for another day.


Sidebar: The report also confirmed, yet again, the various studies which show that people underutilize their prepayment privileges.

In the last year, out of respondents with a mortgage, 70% did not make any extra payments.

By far, the most common reason cited for not making an extra mortgage payment was “a lack of extra money.”

 canadianmortgagetrends
Posted in advice on locking in your mortgage, Bank of Canada, Bank of canada rates, BC Mortgages, Best Rate Mortgages, Canadian Economy, Canadian Mortgage News, Debt, fixed or variable rate or both, Fixed rates, Interest \rate Increases, Jim Flaherty, Kamloops broker, Kamloops First Time Home Buyer Tips, kamloops mortgage, Kamloops Mortgage Broker, Kamloops mortgage consultant, kamloops mortgage financing, Kamloops Mortgages, Kelowna Mortgage Broker, Kelowna Mortgage Financing - Lisa Alentejano, Low Interest Rates, mark carney, Mortgage Affordability, Mortgage Broker Kamloops, mortgage financing kamloops, Mortgage Language, Mortgage Rates, Mortgages - Get a second opinion, paying a penalty to break my mortgage, Pre Approval Mortgage, Protecting your biggest investment your mortgage, rate fixed mortgage, Real Estate Market, Refinance Your Mortgage, Renewing your mortgage, salmon Arm mortgages, should you lock in your mortgage, variable rate mortgages, Vernon Mortgage, Why use a mortgage broker

Mortgage Rates – How to protect yourself when they increase – Video message!

Heres a video I personally did on how to take a proative approach to protect and prepare yourself with rising interest rates in the future and save thousands of dollars! Click below to view video

Inflation Hedge Strategy - Learn to protect yourself from rising rates

Lisa Alentejano

Posted in British Columbia Mortgages, Canadian Economy, Canadian Mortgage News, First Time Home Buyer Steps, Hombuyers Downpayment, Mortgage Rates, Mortgages - Get a second opinion, Protecting your biggest investment your mortgage, Why use a mortgage broker

RBC mortgage specialist goes to far

Royal bank mortgage specialist wrote a very mis informed article about what mortgage brokers do and what type of services we offer. Read the statement here

Competition is good i think, and it gives me more reasons to show the clients that come from RBC to me,  things like this.  Move over RBC , brokers are gaining more and more market share.

Im not going to spend alot of time arguing her points, you can clearly find other articles on my blog that explain the value of using a mortgage broker.

Enjoy the read, i sure did.

Posted in BC Mortgages, BCMortgage, Best Rate Mortgages, British Columbia Mortgages, Canadian Economy, Canadian Housing Market - Lisa Alentejano, Canadian Mortgage News, Debt, Home Equity, Home Loans, Mortgage Affordability, Mortgage by Lisa Alentejano, Mortgage Playground - Lisa Alentejano, Mortgage Consultant, Mortgage Rates, Mortgages - Get a second opinion, Protecting your biggest investment your mortgage, Real Estate Market, Refinance Your Mortgage, Refinancing

Canadians comfortable with their mortgage debt levels

One third have made additional payments in the last 12 months
Canadian Association of Accredited Mortgage Professionals releases
Annual State of the Residential Mortgage Market in Canada report
Toronto, ON (November 8, 2010) – Canadian homeowners are comfortable with their
mortgage debt, have significant home equity and could withstand an increase in their mortgage
interest rate, according to the sixth Annual State of the Residential Mortgage Market report from
the Canadian Association of Accredited Mortgage Professionals (CAAMP), released today.
Highlights:
• The vast majority of Canadians with mortgages are able to afford at least a $300
increase in their monthly mortgage payments.
• One in three (35 per cent) mortgage holders have either increased their payments or
made a lump sum payment on their mortgage in the last year.
• 89 per cent of Canadian homeowners have at least 10 per cent equity in their homes
and 80 per cent have more than 20 per cent equity.
• Overall home equity is at 72 per cent of the total value of housing in Canada; for
homeowners who have mortgages, equity level averages 50 per cent.
• As of August 2010, there was $1.01 trillion in outstanding residential mortgage credit in
Canada, an increase of 7.6 per cent from last year.
“Canadians are being smart and responsible with their mortgages,” said Jim Murphy, AMP,
President and CEO of CAAMP. “They are building equity in their homes and making informed,
long-term mortgage decisions. The survey results speak to the strength of our mortgage market,
especially when compared to the United States.”
Homeownership is a good long-term investment. Most Canadians agree that buying a home is a good long-term investment and are focused on their mortgages to support that investment. Many mortgage holders are making voluntary additional payments: 16 per cent have increased monthly payments during the past year, 12 per cent have made lump sum payments, and 7 percent did both.
Canadians are exercising caution when taking out their mortgages, with a majority choosing a
fixed-rate (66 per cent). A five-year fixed-rate mortgage remains the most popular option in
Canada. Despite the fact that variable rate mortgages have become much less expensive
compared to fixed rates, the majority choice is still fixed rates: this decision is based on people’s
individual assessments of risk, not just the cost difference. Potential rate increases won’t be a problem.
The CAAMP study found that a vast majority of Canadians have significant capabilities to afford
higher payments if and when mortgage interest rates rise. 84 per cent report that they could
weather an increase of $300 or more on their monthly payments.
Most of the people who have low tolerances for increased payments have fixed rate mortgages,
by the time their mortgages are due for renewal, their financial capacity will have expanded and
their mortgage principal will have been reduced.
Also, Canadians have been able to negotiate better than posted mortgage interest rates. For
five year fixed rate mortgages arranged in the past year, the average rate is 4.23%, which is
1.42 points lower than typical, advertised rates.
Of the 1.4 million Canadians who renewed their mortgage in the past year, 72 per cent were
able to renegotiate a decreased rate: on average, rates are 1.09 percentage points less than the
rates prior to renegotiating.
Canadians have significant equity in their homes, strengthening the housing market Canadians’ home equity is impressively high. Among homeowners who have mortgages, the
average amount of equity is about $146,000, or 50 per cent of the average value of their homes.
The amount of equity take-out in the past year is unchanged from last year with around one in
five homeowners, or 18 per cent, taking equity out of their home, at an average of $46,000. The
most common purpose for equity take-out is debt consolidation and repayment (45 per cent)
followed by home renovations (43 per cent), purchases and education (19 per cent) and then
investments (16 per cent).
The report is authored by CAAMP Chief Economist Will Dunning and based on information
gathered by Maritz Research Canada in a survey of Canadian consumers conducted in October

Posted in BC Mortgages, Mortgage by Lisa Alentejano, mortgage financing kamloops, Mortgage Playground - Lisa Alentejano, Mortgage Consultant, Mortgages - Get a second opinion, Pre Approval Mortgage, Save your money

Why you should never marry your bank!

Have you ever noticed the longer a relationship is, the more likely those in the relationship will take advantage of each other? Often true in dating, marriage, and even banking.

Yes banks, like them or not, they have been known to take advantage of long-time loyal customers. Banks are keenly aware that a long-time loyal customer is less likely to shop around and get a second opinion. Yet shopping around is a simple way to ensure you are always getting a good deal.

Now I am not suggesting all banks are bad, but I have seen many loyal customers who have had the wool pulled over their eyes because their bank has become too comfortable with the relationship.

When you have been married for a long time, the indiscretions are usually minor and amount to dirty socks being left on the bedroom floor, or failing to put the lid back on the toothpaste. Incidentally, both are criminal offences in my home.  However, in your case, when your bank begins to treat you like Zsa Zsa Gabor treated her 8th husband, you know you have a problem.

Mortgage renewals are a perfect example. When a client has an existing mortgage they are typically mailed a notice with various rate options. The idea is for the borrower to choose an option, sign it, and send it back in. However, the rates quoted on the renewal notices are typically 0.50% -1.00% higher than the best available rates at any given time!

If you have a 30 year $200,000 mortgage, an increase of 0.50% over the life of the mortgage amounts to over $21,000 in interest! Not a small sum of money.

The crazy thing is that new customers who have no pre-existing relationship will typically be offered lower, more attractive rates in order to convince them to become a customer. Then, unfortunately, once you are a customer, the onus is on you to make sure you always get a good deal.

My suggestion is as follows – begin dating your bank, but do not get married.  Commitment is sound advice for most relationships, but it can be very costly when it comes to your finances.  The best way to ensure your bank treats you like a first date instead of a 3rd marriage is to get educated. Understand your options and for heaven sakes, always shop around before you sign on the dotted line. Make a few calls to make sure you and your business are courted, not taken advantage of!